SB 1233

SB1233:v95#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill

No. 1233

An act to amend Section 913.1 of, and to add Section 454.05 to to, the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL'S DIGEST

SB 1233, as amended, Allen. Public utilities: rates.

Existing law authorizes the Public Utilities Commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law prohibits a public utility from changing a rate or altering a classification, contract, practice, or rule that would result in a new rate, except upon a showing before the commission and a finding by the commission that the new rate is justified and the public utility notifying its customers of the rate change.

This bill would require an electrical corporation or gas corporation proposing to change a rate or to alter a classification, contract, practice, or rule that would result in a new rate, based directly or indirectly on its request for return on invested capital, to include in its proposal certain information, as provided. The bill would require the commission, in approving the rate change, to take into account, and make specific findings related to to, wildfire risk reduction efforts taken by the electrical corporation.

Existing law requires the commission, by May 1 of each year, to prepare and submit a written report to the Governor and the Legislature that contains the commission’s recommendations for actions to limit electrical corporations’ and gas corporations’ utility costs and rate increases or to substantially reduce monthly electricity and natural gas utility bills, and that considers how the adoption of decarbonization policies may impact the total energy costs borne by consumers.This bill would require that report to additionally include, for each electrical corporation and gas corporation, comparisons for each of the previous 5 years presented by each functional category of operations, across all operations of the corporation, of certain expenditures of the corporation, as specified. The bill would require the commission to make all source data used to produce the report available to the public in an electronic format on its internet website.

Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the above provisions would be part of the act and a violation of a commission action implementing the bill’s requirements would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Section 454.05 is added to the Public Utilities Code, to read:

454.05.

(a) If an electrical corporation or gas corporation proposes to change a rate, or to alter a classification, contract, practice, or rule that would result in a new rate, based directly or indirectly on its request for return on invested capital, the electrical corporation or gas corporation shall include both of the following in its proposal:

(1) Information showing the amount of internally generated cash available to self-fund investment needed to provide safe and reliable public utility services, including deferred taxes, depreciation, and amortization, and the extent of the need to acquire external investment.

(2) Information showing the relationship between capital structure and return on equity that minimizes the overall revenue requirement, including taxes.

(b) In approving a rate change proposed pursuant to this section, the commission shall take into account, and make specific findings related to to, wildfire risk reduction efforts taken by the electrical corporation.

(c) The commission shall make findings consistent with Section 1705 on the matters in subdivision (a) to support an order approving a rate change pursuant to this section.

SEC. 2.

Section 913.1 of the Public Utilities Code is amended to read:

913.1.

(a) (1) The commission, by May 1, 2010, and by each May 1 thereafter, shall prepare and submit a written report, separate from and in addition to the report required by Section 913, to the Governor and Legislature that contains all of the following:

(1)

(A) The commission’s recommendations for actions that can be undertaken during the succeeding 12 months to limit electrical corporations’ and gas corporations’ utility costs and rate increases.

(2)

(B) The commission’s recommendations that may take longer than 12 months to implement, but could lead to substantial reductions in monthly electricity and natural gas utility bills.

(3)

(C) Considerations of how the adoption of decarbonization policies, including electrification, may impact the total energy costs borne by consumers, including electricity, natural gas, and fuel for transportation, consistent with the state’s energy and environmental goals, including goals for reducing emissions of greenhouse gases.

(2) The report shall also include, for each electrical corporation and gas corporation, all of the following comparisons for each of the previous five years presented by each functional category of operations, across all operations of the corporation:(A) Authorized annual revenue requirements for all expenses subject to forecast ratemaking and not tracked in balancing accounts.(B) Recorded spending for all expenses subject to forecast ratemaking and not tracked in balancing accounts.(C) Authorized and recorded expense spending tracked in balancing accounts.(D) Authorized annual revenue requirements for all capital spending not tracked in balancing accounts. This information shall include the underlying forecasts of capital spending in each functional category of operations used to determine the annual revenue requirements.(E) Recorded spending for all capital spending subject to forecast ratemaking and not tracked in balancing accounts.(F) Authorized and recorded capital spending tracked in balancing accounts.

(b) In preparing the report required by subdivision (a), the commission shall require electrical corporations with 1,000,000 or more retail customers in California, and gas corporations with 500,000 or more retail customers in California, to study and report on measures the corporation recommends be undertaken to limit costs and rate increases.

(c) The commission shall post do both of the following:

(1) Post the report required by subdivision (a) in a conspicuous area of its internet website.

(2) Make all source data used to produce the report available to the public in an electronic format on its internet website.

SEC. 2.SEC. 3.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.